I am completing Form 1041 for my mother's estate. The estate had small amounts of income from a few sources (rental house, interest, dividends and IRA Distributions received after death).
Question 1 - As executor, I distributed only the dividend income to beneficiaries in 2024 (amount $666). The rest of income was taxable to estate in 2024 and will be distributed with remaining corpus in 2025. When I compete Form 1041, Turbotax is pro-rating the $666 distribution and showing it spread among all the income sources on K-1's (interest, rental, dividend, etc). In the Step-by-Step, it asked only for the total distribution to each beneficiary, not which type of income was distributed. On the Forms, Distributable Income for K-1, Part II, there is a box to click "Check to allocate deductions pro-rata to all classes" which I have not clicked, but it still is spreading the distribution across all income types. Is there a way to show the $666 distribution only against the dividend income? I wouldn't care how it spreads it, but it's affecting the amount of depreciation on the rental house which will complicate things when we sell it in 2025.
Question 2 - The amounts of income and distributions are small. Is it ok to simplify things and not claim deduction for the $666 dividend distribution on Form 1041 at all? This would effectively allow estate to pay tax on the $666 instead of the beneficiaries. Or do I have to claim it on 1041 if a distribution was made?
Question 3 - My mother received a 1099-R for IRA RMD distribution which was received after her death, so I completed her 1040 form Line 8 & Sched 1 with negative income to remove this from her personal 1040. Then I wrote a 1099-R to Nominee the estate. Now I am completing 1041 for the estate and showing the IRA distribution as Other Income on Line 8. Question is whether this IRA distribution should be treated as Income with Respect to Decedent IRD?
Thanks for any help!
